When Will the Trump Foundation Lose its Tax Exempt Status?

The Daily Beast has an article today on the pending legal troubles Trump may have gotten his foundation in during the course of his run for the Presidency. In my legal career, I’ve worked in house for 501(c)(3) organizations and I’ve long considered the question of whether the Trump Foundation would lose its tax exempt status to be a matter of “when” not “if.”

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The “veterans rally” that Trump used to funnel donations into the Trump Foundation during the course of his campaign might end up being the straw that broke the camel’s back in this regard. As anyone who works compliance for a 501(c)(3) can tell you, having an event where you even invite a politician to speak is dicey business, especially if they are actually running for election at the time. You have to take meticulous care to ensure that the event does not give the appearance of supporting the candidate in question, and you have to make sure the candidate in question knows not to plug themselves or their campaign during the course of their speech.

Of course, none of that happened during the course of the Trump veterans’ rally, which was an open campaign rally for all the candidates who attended. In fact, the Trump Campaign had a donation page on their website which directly linked to the Trump Foundation. When the issue became a political liability for Trump, all the checks were cut out of the Trump Foundation accounts.

As the DB notes, there’s a whole cottage industry of left wing organizations who exist for no reason other than to file complaints with the FEC and IRS over this activity, and they have already descended like vultures on the Trump Foundation:

But in key early primary states this year, Trump handed out Foundation checks to charities at campaign rallies. This also calls into question “whether the foundation provided the campaign with an illegal in-kind contribution by providing services for what was a campaign event. Under the campaign finance laws… providing anything of value to a campaign for free or at less than fair market value is a contribution to the campaign,” said Larry Noble, the general counsel at the Campaign Legal Center.

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Many good organizations have been brought down by violations far more trivial than Trump engages in on a daily basis. The Trump Foundation’s disregard for even appearing to follow the law might well lead the IRS and FEC to take punitive action against the Foundation, beyond just revoking their tax exempt status.

Ironically, the only thing that might save the Trump Foundation’s status would be… Trump getting elected President and ordering the IRS to ignore his Foundation’s disregard for the law. Which he would totally do, I am sure.

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